The auctions aimed at privatizing 12 airports exceeded the minimum bids stipulated by the government at a minimum $548 million. Altogether, bids for the three blocks added up to $620 million. The terminals are divided into Northeast, Southeast, and Central-West, and receive a total of 19.6 million passengers a year—9.5 percent of Brazil’s aviation market. The investment predicted for the three blocks is $913 million over the course of 30 years.

The auction on Friday (Mar. 15), held in São Paulo, was the first in the block model. Until then, terminals received bids individually. Splitting the airports into three blocks, the government reported, is linked to a higher potential in the use of the terminals: Northeast for tourism, Central-West for agribusinesses, and Southeast for business activities connected to energy, like oil and gas.

Under the tender, the winner is the bidder with the highest premium on the minimum initial contribution for the block. For the Northeast, the minimal initial bid was $44.6 million; for the Southeast, $12.2 million; whereas for the Central-West, $208.8 thousand. These amount must be paid in cash along with the premium offered on the day the contract is signed.

In a contest marked by a high number of bids, the most competitive block was the Northeast, between Spanish group Aena Desarrollo Internacional and Swiss Zurich Airport. Aena offered $495.5 million and won the lot, formed by the airports of João Pessoa and Campina Grande (both in Paraíba state), Recife (in Pernambuco), Maceió (in Alagoas), Aracaju (in Sergipe), and Juazeiro do Norte (in Ceará).

The Central-West block, made up of the airports in Cuiabá, Rondonópolis, Sinop, and Alta Floresta, all of which in Mato Grosso, received two bids. The winning bid, placed by the Aeroeste consortium, was $10.4 million, a premium of 4,739 percent.

As for the Southeast, encompassing the terminals in Macaé, in Rio de Janeiro, and Vitória, in Espírito Santo, four bids were brought forward. Zurich Airport came out victorious with a $114 million bid—a premium of 830.15 percent.

Tender

First, winning groups will not have to pay anything in the first five-year period. After that, the percentage on revenues must be paid for the duration of the contract.

Winners will first have to renovate washrooms, signs, free Wi-Fi, air conditioning, treadmills and escalators, elevators, among others.

This is the fifth round of airport concessions, started in 2011. The government believes the concessions may improve service quality through new investments.